Read my lips, raise our taxes

Published: May 20, 2011

Fundamentally, government is all of us doing together what we cannot do alone. In a democratic republic such as the United States, we elect our representatives to express the common will, not to do the quirky things that individually they may want to do, divorced from consensus.
Both in the U.S. House of Representatives and the New Hampshire Legislature, of late, an ideology of not raising additional revenue, no matter what the consequences, seems to have taken over. While it certainly is necessary to solve the federal deficit problem and balance the state budget, the revenue side of the equation should have equal weight and attention that the spending side seems to have.Particularly in New Hampshire, the budget solutions that have been fashioned by the House and are being considered by the Senate cut too deeply into established programs, institutions and services that have been developed over the years. A 45 percent cut to the University System of New Hampshire's state appropriation, elimination of state scholarship aid, huge cuts to human service budgets, elimination of programs on a wholesale basis and other proposals point out the need to examine whether we should raise more money as we examine how we spend it.Most observers looking fairly at what is going on in Concord, think the Legislature has gone too far. If legislators are unwilling to predict higher revenue than the estimates that are being used by the House and probably the Senate, then to preserve needed services, taxes and other revenue sources should be examined.In a thoughtful article written on May 11, Charlie Arlinghaus, president of the Josiah Bartlett Center, urged New Hampshire legislators to look at revenue reform (although he should not be accused of asking for higher taxes). He rightly pointed out that the patchwork quilt of revenue-raising devices used in New Hampshire has produced a structural deficit.He cited the efforts of then-Gov. Walter Peterson and the Legislature in 1971 when they replaced the antiquated stock and trade tax that taxed business on the basis of capital (inventory and machinery) and replaced it with the business profits tax, which recognized economic activity generated profits.While Arlinghaus did not say it, the other half of the revenue equation in 1971 and today was the fact that the value of land and buildings is taxed by the property tax, and serious questions exist as to whether that is the best and fairest way to tax or whether income and investments have replaced land and buildings as a true measure of wealth.There are a host of examples of taxes that could be examined and adjusted and should be considered. A Legislature that proposes to eliminate a $30 surcharge on car registrations and deepen the imbalance should at least consider continuing it. One that refuses to raise the gas tax when all of us are driving more efficient cars, using less gas and therefore paying less tax, should consider at least whether the actual dollars of tax paid should be kept the same by raising the rate of the tax.When we consider spending and programs, and we consider the obligation to have a balanced state budget, if we come to the conclusion that we have cut as far as we can or further than we should, as I have concluded in watching what the Legislature is doing, then the alternative is to come up with the revenue needed to pay for it.My hunch is that the majority of the people of the state would accept a moderate increase in certain fees, taxes and revenue sources in order to preserve what we have and the quality of life in New Hampshire.Consideration of tax reform, elimination of a lot of the deductions, institution of a flat rate, or at least a limited number of rate systems, all have been proposed in the past, and probably would go a long way to raising the taxes.George H.W. Bush got in a lot of trouble after he said, "Read my lips, no new taxes," and then allowed a tax increase of moderate dimensions. Walter Mondale, in a debate with Ronald Reagan in 1987 said, "Mr. Reagan won't say he will raise your taxes. I just did." Mondale lost. It is not a popular political thought that taxes have to go up along with spending going down, but it is the truth. Politicians had better start saying it, believing it and doing it, or we are all in trouble.Brad Cook is a shareholder in the Manchester law firm of Sheehan Phinney Bass + Green and heads its government relations and estate planning groups. He also serves as secretary of the Business and Industry Association of New Hampshire.

This article appears in the May 20 2011 issue of New Hampshire Business Review